A Short but Savvy Guide to Home Mortgages

Introduction

One of most exciting, but stressful, decisions you will make in life is buying your first home. You spend many weekends and evenings looking at houses and neighborhoods. You check on schools, taxes, shoppings centers, and utility providers. You find your dream home and decide to buy it, move and settle in.

But, wait, there is another important decision to make, possibly the most important in the entire home-buying process. Finding a mortgage. When you input the term, "home mortgage," into google.com, be prepared for the onslaught of sites devoted to mortgages...over 2,060,000! Much of it is impossible to understand, or is specifically targeted to a geographic area. The following links will give you a starting point for finding information that is geared towards the first-time home buyer with easy to understand language.

Guides to Home Mortgages

Fannie Mae and Freddie Mac are stockholder-owned companies originally chartered by Congress to supply funds that mortgage lenders such as commercial banks, savings institutions, and credit unions, make available to homebuyers and multifamily investors. The FHA is the Federal Housing Administration, a part of the U.S. Department of Housing and Urban Development (HUD). The FHA insures the loan and pays the lender if the borrower defaults on the mortgage. Because the lender is protected by FHA mortgage insurance, it can offer loans to a larger pool of prospective homeowners.

Fannie Mae

Fannie Mae is a private, shareholder-owned company that works to make sure mortgage money is available for people in communities all across America. They do not lend money directly to home buyers. Instead, they work with lenders to make sure they don't run out of mortgage funds, so more people can achieve the dream of homeownership. They are the country's third largest corporation, in terms of assets, and the nation's largest source of financing for home mortgages. They are one of the largest financial services corporations in the world. And with approximately 4,500 dedicated employees, they are also one of the world's most productive corporations. Fannie Mae stock (FNM) is actively traded on the New York Stock Exchange and other exchanges and is part of the Standard & Poor's 500 Composite Stock Price Index. Fannie Mae was created by Congress in 1938 to bolster the housing industry during the Depression. At that time, Fannie Mae was part of the Federal Housing Administration (FHA) and authorized to buy only FHA-insured loans to replenish lenders' supply of money.

Freddie Mac

When Congress created Freddie Mac's charter in 1970, it set a clear mission: stabilize the nation's mortgage markets and expand opportunities for homeownership and affordable rental housing. Over the past 30 years, Freddie Mac has accomplished this and more. They have done so not by making individual mortgage loans to consumers, but rather by ensuring that there is a continuous flow of funds to mortgage lenders. As a secondary market for mortgage loans, Freddie Mac purchases mortgages from lenders across the country and packages them into securities that can be sold to investors. Through this securitization process, they ultimately provide low- to middle-income homeowners and renters with lower housing costs and better access to home financing.

Understanding the home mortgage process

An introduction to looking for a mortgage by the Federal Reserve Board, the central bank of the United States, which was founded by Congress in 1913 to provide the nation with a safer, more flexible, and more stable monetary and financial system. Today the Federal Reserve's duties fall into four general areas: (1) conducting the nation's monetary policy; (2) supervising and regulating banking institutions and protecting the credit rights of consumers; (3) maintaining the stability of the financial system; and (4) providing certain financial services to the U.S. government, the public, financial institutions, and foreign official institutions

Federal Consumer Information Center

Providing the public with timely, relevant consumer information is what the Federal Consumer Information Center is all about. FCIC pays close attention to emerging consumer issues and topics. They regularly review new information coming from federal agencies and consumer organizations as a result of ongoing research, legislation and public programs. Whether it's new information to be posted on the FCIC web site or publications to be listed in the Consumer Information Catalog, criteria include timeliness, clarity, cost, and practical relevance to the everyday needs of consumers. Their "Guide to Single Family Home Mortgage Insurance" is a step-by-step guide to finding a mortgage company or lender.

Home Loans Directory

A directory of home mortgage companies for all fifty states.

VALoans

VALoans.com is an Internet Solution Provider, which refers Veterans at no cost to the Affinity Partners as well as Real Estate Companies within their network. These services include providing home sale and home marketing assistance, property management, closing services, rental assistance, mortgage services, real estate consulting services and insurance products. Texcorp Mortgage Bankers, Incorporated, has been in the mortgage banking business since December 1986. Headquartered in Houston, Texas, the company changed its focus to online mortgage banking and started doing business under the name VALoans.com. The company has grown rapidly over the past few years and is constantly introducing additional financial products, creating new affinity relationships and presenting Veterans with helpful information through its VALoans.com Newsletter.

The company is approved as a National VA Lender and is an active member of the Houston Chapter of the Better Business Bureau and the National BBB Online. Over the past few years, VALoans.com and its affiliates have funded over 1 billion dollars in VA Loans. These loans are often made without any downpayment at all, and frequently offer lower interest rates than ordinarily available with other kinds of loans. Aside from the veteran's certificate of eligibility and the VA-assigned appraisal, the application process is not much different than any other type of mortgage loan. And if the lender is approved for automatic processing, as more and more lenders are now, a buyer's loan can be processed and closed by the lender without waiting for VA's approval of the credit application. Additionally, if the lender is approved under VA's Lender Appraisal Processing Program (LAPP), the lender may review the appraisal completed by a VA-assigned appraiser and close the loan on the basis of that review.

Housing and Urban Development

Financial Tools and Calculators

Easy-to-use tools and calculators to estimate how much home you can afford and which loan is right for you. Plug in your numbers, answer a few questions, and receive basic financial information to get started in your search. Calculators help you determine price, monthly payments, even refinancing and equity.

Reference Books

There are many reference books on the market for first time home buyers. These are a sampling of books that answer basic questions, guide you through the process, and link you to other sources for more information.



Originally Created by
Debbie Whittemore - 2/15/02
Email: dwhittemore1@msn.com